MetLife Inc., the largest U.S. life insurer, sued Morgan Stanley in New York state court for fraud over $757 million in residential mortgage-backed securities purchased in 2006 and 2007.
MetLife accuses the New York-based bank of telling it that the mortgage loans backing the securities were originated based on “specific underwriting guidelines” and collateralized by properties that had been “accurately appraised.”
“In truth, and as MetLife and the world would only later discover, the originators whose loans collateralized the Morgan Stanley RMBS at issue were among the worst of the worst culprits in the subprime lending industry,” New York-based MetLife said in a complaint filed yesterday in New York State Supreme Court in Manhattan.
Mark Lake, a spokesman for Morgan Stanley, declined to comment on the lawsuit.
The case is Metropolitan Life Insurance Co. v. Morgan Stanley, 651360/2012, New York State Supreme Court (Manhattan).